AMC Q2 Earnings Call Teases Upcoming Innovations

In between touting the strength of the exhibition industry as we move into the back half of 2019, AMC CEO Adam Aron took some time during yesterday’s Q2 earnings call to discuss potential innovations in play at the chain.

Within “the last 30 to 90 days,” noted Aron, 30 AMC cinemas located across Boston, Columbus, Indianapolis, and San Diego have introduced a pricing surcharge—ranging from $0.50, $1, and $1.50 per ticket—applied to “select movies that are of the highest appeal to moviegoers, and which would appear to have the highest consumer demand…. Think of it being applied, say, to one or two movie titles each month.” Should this test prove successful and be rolled out nationwide, per Aron, AMC Stubs loyalty members (including members of AMC’s A-List subscription program) “will be exempt from these… higher ticket prices, giving even more value to these two programs.”

This inclusion of a ticketing surcharge is so recent, notes Aron, that “it’s a little too early to know how consumers will respond over time. But we see nothing that scares us yet.” The CEO notes that changing ticket price based on demand is not new for the chain; several years back, they “instituted higher pricing on weekend days and lower prices on Tuesdays,” which resulted in Tuesdays going from the least-visited day of the week to the second-most visited. (That does not, clarifies Aron, mean Tuesdays have the second-highest revenue, a spot that still belongs to Friday due to higher ticket prices.)

Additionally, “we’ve looked at a whole slew of ideas [of] charging more for large screens, charging more for the best seats in the house, maybe charging less for the front row, because they’re not the best seats in the house, charging more for blockbusters.”

Moving forward, AMC will continue to look at “charg[ing] more in peak periods and charg[ing] more for high-demand products, but charg[ing] less in the off-peak. These pricing strategies have been commonplace across our European theaters for years, and industry observers have talked about this idea coming to the United States also for years.”

A change is also forthcoming to AMC’s popular subscription program, AMC Stubs A-List, which has just crossed the 900,000-member mark. This update, per Aron to be launched in October, will allow “couples or groups of friends” to subscribe to A-List individually and subsequently “make their A-List reservations for a particular movie collectively…. For example, if you’re both members of A-List, in one single transaction rather than having to do it in two separate transactions and hope that [the person you’re going to the movie with] quickly grabs H7 immediately after you grabbed H6 and that no one else grabbed that seat out from underneath the two of you. We are not expecting to reduce price, however. That’s a service enhancement to our guests.” This service will be called AMC Stubs A-List Entourage.

Finally, per the Q2 earnings call, AMC is attempting to make inroads on the matter of streaming live sporting events, an area that in the past has been fraught with contract and rights concerns. Notes Aron, “We are very close to reaching final agreement on a concept that we have been working on for more than two years. Starting this fall, we hope and expect to be able to broadcast live sporting events, a meaningful number of games on weekend [in] the afternoons, at a select number of theaters, across the country at AMC, across all three of our brands, from one of the four major professional sports leagues. Again, if consumers respond favorably to seeing live sports broadcasts on, say, a 30-foot or 40-foot screen, as we think they certainly will, this could be the start of considerably more live sports programming at AMC.” AMC has screened live sports events in the past on a more limited basis through their collaboration with event services distributor Fathom Events, which has had particular success with bringing boxing to movie theaters.

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